Daraine Luton, Senior Staff Reporter

THE WAY has been cleared for the removal of customs duties on certain items, including frog's legs, being imported from the European Union.

Banana plants, cocoa plants, coconut plants, citrus plants, carrots, beets and pineapples are among the other items for which no duties will be applied, but Finance Minister Dr Peter Phillips says he is not in favour of using high duties as a barrier to entry of some agricultural produce at the country's ports.

"If a man can come and outproduce us and sell sorrel here cheaper than we can grow it, it is a comment not on them, and quite frankly, I don't believe in erecting massive tariff barriers that penalise our consumers," Phillips said.

The minister was speaking during debate on the Customs Tariff (CARIFORUM/EC Economic Partnership Agreement) Resolution, which was passed by the House of Representatives on Tuesday.

Opposition MP Dr Ken Baugh had suggested that many of those agricultural products are heavily subsidised and Phillips' response was "we must deal with that".

"We have to make sure that the domestic economy of our country does not suffer as a consequence. We have to be on the watch for dumping," Baugh said.

The 2008 agreement between CARIFORUM countries and the European Community under the Economic Partnership Agreement allows for free trade between European countries and CARIFORUM member states.

"The resolution that has been brought before the House provides for the elimination of duties on certain tariff lines which were committed to immediate liberation in order to fulfil Jamaica's obligations under the phase of tariff liberalisation," Phillips told the House.

"An assessment of the potential fiscal displacement that would ensue as a result of the immediate liberalisation of these tariff lines was $62.8 million based on the data available for 2011," Phillips said.

"The fiscal implications of the agreement have been accommodated with more revenue-sensitive tariff lines being subject to liberation over a longer period of time," Phillips said.

Loss of tax revenue

He told the Parliament that at the end of 25 years when the protection is removed, Jamaica stands to lose less than one per cent of total tax revenue.

In the meantime, the agreement also provides for the phased reduction of customs duties on other tariff lines. The agreement allows for a gradual reduction of the duties for up to 25 years before duties are removed.

"The agreement is particularly accommodating to the interest of Jamaica most sensitive industries within the agricultural and manufacturing sectors where an extended lists of tariff lines have been included from the liberalisation within the context of this agreement," Phillips said.

daraine.luton@gleanerjm.com